Much has been written about the theoretical attractions for financially troubled countries in exiting the euro-zone. But the question of how a country would go about it is less well explored. And the more closely you examine the question of "how" - as opposed to "why" - a country might leave the euro, the clearer it becomes that the practical difficulties are huge.
To establish a new currency a country would have to convert all existing euro-denominated savings at a fixed rate on a given date. But savers and businesses would not wait passively for that date to arrive. The euro may be under pressure, but leaving it could make things worse The main reason for creating a new currency would be to increase the country's competitiveness by making its exports cheaper. So savers and investors would assume that the new currency would depreciate against the euro - probably very rapidly - and want to keep their savings in euros, or transfer them to another well-established currency such as the US dollar.
The first practical problem, then, is that if it becomes clear that a country is seriously thinking of leaving the euro a huge amount of money will leave the country. This is sometimes referred to as "capital flight". The overall effect would be to trigger huge transfers of deposits out of the country and wreck the banking system. The government in question would almost certainly try to impose controls to prevent this kind of capital flight, but senior policy-makers are very sceptical about whether such controls would be effective in 21st century Europe.
But if a prolonged national debate about leaving the euro creates a risk of capital flight, would the alternative be to prepare in secret and announce it suddenly? Such a plan might work in a totalitarian state, but does not allow for parliamentary debate, legislation and all the other processes of a modern democracy. And the idea that huge numbers of new bank notes could be prepared and distributed in secret - ready for the appointed currency conversion date - is absurd.
Europe's troubled economies are finding it hard to borrow money from investors However, suppose for a moment that these practical problems could be overcome, where would the country leaving the euro stand financially? It would have a large national debt denominated in euros. Remaining committed to paying interest on that debt in euros while tax revenues are generated in the new currency would be a big risk.
The alternative would be to announce that national borrowings have been converted into the new currency. For overseas bond investors, this would amount to a default. When the country wanted to borrow more it would almost certainly have to pay punitive interest rates to persuade bond market investors to participate.